Posts made in September, 2021

Everything You Need to Know About BAH 2021

»Posted by on Sep 22, 2021 in Real Estate | 0 comments

Basic Allowance for Housing or commonly known as BAH refers to the allowance given by the United States to its citizens as prescribed by dependency status, pay grade, and geographic duty location. It provides its members as well as their families allowance based on the average amount of rental cost in their duty area. This is to help the members have a comfortable life despite the market costs of housing and rentals in the current area where the service member is located.   

According to a report released by the Department of Defense this year, BAH rates have increased by 2.9%, which is equivalent to 23 billion dollars. Although there is an increased rate in most stations, others will experience a significant decrease. A lot of people may ask if changes to BAH rates are normal. Well, it is depending on the examination report that DOD does every year. Currently, the office examines almost 300 housing areas per year in the United States. The examination is based on the information given by different sectors like military housing private party ventures (PPV) offices and local commands. From this information, the DOD will then determine if a particular duty station shall have an increased or decreased BAH rates. Try Hawaii BAH if you are currently in the islands.   

Tip: If you want help in calculating your Basic Allowance for Housing, there are many BAH calculators you can find on the Internet.  

Does BAH cover all expenses?  

Although BAH almost covers everything of the housing fees, it does not technically and fully cover every expense that the service member has. Typically, BAH covers up to 95% of the housing costs, and the remaining 5% would be for personal use, which accounts for up to 158 dollars per month, depending on several factors. The amount intended for this depends on the member’s rank, choice of housing, and dependency status. However, despite variations in the funds for personal use, BAH’s 95% is already giving the members most of what they need. According to the press, even without the 5% allowance, BAH is able to provide comfortable living to its service members.   

Additionally, BAH percentage division is not constant. In 2000, it covers only 80% of the total housing costs, and in 2005, BAH funds were intended only for housing fees, with no amount for personal use. It was only after 2005 that the DOD decided to give 5% of the BAH for out-of-pocket expenses.   

It is also important to know that the annual BAH changes will not affect the members’ commitments if the commitments are provided and made in the previous years BAH. This means that if a member’s current duty station goes down, his BAH will still have the same commitments he had been given prior to the recent changes made by the DOD. Fortunately, still, this policy does not apply when the BAH of the current duty station goes up. The members will experience the BAH increase in the new year if so.   

There is also a difference in BAH for members who live off-base and on-base. Off-base members would usually have more out-of-pocket allowance, while the on-base members would usually have less personal allowance in their BAH.   

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